Surplus Theory vs. Demand Theory: Chengdu's Five-Star Hotels to Reach 50 in the Future
Release Time:
2023-04-25 13:12
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Currently, there are 18 five-star hotels officially designated in Chengdu and those built to five-star standards but not yet designated. By 2012, the city is expected to have 50 five-star hotels in operation, over 30 four-star hotels, and countless other star-rated and business hotels.
Since 2007, the number of five-star hotels in Chengdu has grown rapidly. Hilton Hotels Group officially signed a contract with Chengdu Intime Center, Chengdu Palm Springs signed with international hotel giant Fairmont, Mandarin Oriental and Chengdu Yijiaxin held a signing ceremony in Hong Kong, Park Hyatt is planning to sign with Chengdu ICC... While people were still discussing whether these "signings" would turn into "mere scraps of paper," high-rise buildings combining "office buildings + star hotels" rose rapidly across Chengdu.
Data shows that currently, there are 18 five-star hotels officially designated in Chengdu and those built to five-star standards but not yet designated. By 2012, the city is expected to have 50 five-star hotels in operation, over 30 four-star hotels, and countless other star-rated and business hotels. All of a sudden, so many high-star hotels are expanding in the Chengdu market, including local enterprises like Miny Group, and international hotel brands like Four Seasons, Waldorf Astoria, and Mandarin Oriental. With Chengdu's star-rated hotels currently enjoying a high occupancy rate of 70%-80% on one hand, and a large number of hotel giants flocking to the Chengdu market on the other, both "overcapacity" and "demand" theories are prevalent in the industry.
Current Status
Five-star hotel occupancy rate reaches 58.63%
According to the "National Star-Rated Hotel Statistics Bulletin for Q1 2012" published on the National Tourism Administration's website, Chengdu currently has 134 star-rated hotels, including 12 five-star hotels. An Maocheng, President of the Hotel Branch of Chengdu Tourism Association, told reporters that there are currently 18 five-star hotels officially designated in Chengdu and those built to five-star standards but not yet designated. The "Statistics Bulletin" shows that the average occupancy rate for five-star hotels in Chengdu is 58.63%. In comparison, the average occupancy rate for five-star hotels in Beijing is 57.91%, and in Shanghai it's 54.16%. This means that in the current market environment, the room vacancy rate for five-star hotels in Chengdu is much lower than that in first-tier cities like Beijing and Shanghai.
Chengdu, as a western city striving to become an international, modern metropolis, is building itself into China's best business, MICE, and tourism capital through "business-tourism integration". Undoubtedly, the MICE economy not only creates huge economic benefits but also strongly drives the development of related industries such as tourism, transportation, and hotels. In the first half of 2012, Chengdu hosted 84 exhibitions, 123 festivals, and 7971 various conferences and forums; it attracted 6.275 million visitors from outside Chengdu to attend conferences and exhibitions, a year-on-year increase of 8.9%. From October 18th to 22nd last year, during and after the 12th Western China International Fair held in Chengdu, major hotels in Chengdu, especially five-star hotels, experienced a situation where rooms were "extremely hard to find".
"Currently, the number of five-star hotels in Beijing and Shanghai is 62 and 51 respectively, so Chengdu's hotel industry still has room for development," said An Maocheng. He stated that there is indeed a demand for high-star hotels in Chengdu, especially with Fortune 500 companies setting up operations in the city, which largely contributes to the increase in demand for five-star hotels. "The average occupancy rate for four-star and above hotels in Chengdu is currently around 70%, which is relatively high nationwide."
Future
Number of five-star hotels to reach 50 by 2015
The provincial tourism star-rated hotel management conference held on May 30th this year revealed that in 2012, Sichuan Province had a total of 158 hotels under construction or planned, including 71 five-star, 46 four-star, 31 three-star, and 10 two-star hotels. This year, Sichuan Province itself plans to rate 73 star-rated hotels, of which 16 will be five-star. Additionally, data shows that by 2015, the number of five-star hotels expected to open and operate in Chengdu (including its districts, cities, and counties) will reach 50, which will be more than three times the current number, making it the highest in the central and western regions.
Currently, tourism star-rated hotels are entering a fast lane of accelerated development.
Since 2007, the number of five-star hotels in Chengdu has grown rapidly, especially with international top-tier hotel brands such as Mandarin Oriental, Fairmont, Waldorf Astoria, and Four Seasons settling in Chengdu. "High-star hotels are the 'face' of a city; if star-rated hotels are well-built, they can greatly promote urban development," said An Maocheng. Chengdu, as a central city in inland China and a strong regional economic hub, is striving to become an international, modern metropolis. The charm of an international city lies in its suitability for both living and working, convenient transportation, and open atmosphere.
"The influx of international top-tier hotel brands into Chengdu is inseparable from Chengdu's economic development requirements. Hotels develop in sync with the city. A rapidly developing city like Chengdu needs hotels to enhance its urban brand. Secondly, we need to equip the city with the appropriate number, types, and levels of hotels according to its development needs," said An Maocheng. Furthermore, with the expansion of these international brand hotels in the Chengdu market, competition in Chengdu's hotel industry has undoubtedly intensified, especially impacting local hotel brands such as Jinjiang Hotel.
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